While Orion Group Holdings, Inc. (NYSE:ORN) shareholders have had a good week with the stock up 20%, they shouldn't let their guards down. Although prices were relatively low, insiders chose to sell US$1.5m worth of stock in the past 12 months. This could be a sign of impending weakness.

While we would never suggest that investors should base their decisions solely on what the directors of a company have been doing, we do think it is perfectly logical to keep tabs on what insiders are doing.

The Last 12 Months Of Insider Transactions At Orion Group Holdings

Over the last year, we can see that the biggest insider sale was by the Independent Chairman, Austin Shanfelter, for US$1.1m worth of shares, at about US$12.17 per share. That means that an insider was selling shares at slightly below the current price (US$14.57). When an insider sells below the current price, it suggests that they considered that lower price to be fair. That makes us wonder what they think of the (higher) recent valuation. While insider selling is not a positive sign, we can't be sure if it does mean insiders think the shares are fully valued, so it's only a weak sign. This single sale was just 21% of Austin Shanfelter's stake.

All up, insiders sold more shares in Orion Group Holdings than they bought, over the last year. The chart below shows insider transactions (by companies and individuals) over the last year. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!

If you are like me, then you will not want to miss this free list of small cap stocks that are not only being bought by insiders but also have attractive valuations.

Orion Group Holdings Insiders Are Selling The Stock

Over the last three months, we've seen notably more insider selling, than insider buying, at Orion Group Holdings. We note insiders cashed in US$1.2m worth of shares. Meanwhile CFO, Executive VP & Treasurer Alison Vasquez bought US$50k worth , as we said above . Because the selling vastly outweighs the buying, we'd say this is a somewhat bearish sign.

Insider Ownership

For a common shareholder, it is worth checking how many shares are held by company insiders. We usually like to see fairly high levels of insider ownership. Insiders own 5.7% of Orion Group Holdings shares, worth about US$34m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.

What Might The Insider Transactions At Orion Group Holdings Tell Us?

The insider sales have outweighed the insider buying, at Orion Group Holdings, in the last three months. Despite some insider buying, the longer term picture doesn't make us feel much more positive. But it is good to see that Orion Group Holdings is growing earnings. Insider ownership isn't particularly high, so this analysis makes us cautious about the company. So we'd only buy after careful consideration. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing.

But note: Orion Group Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.